UNITED STATES DISTRICT COURT
DISTRICT OF NEW HAMPSHIRE
Ryan Landry, Plaintiff
v. Case No. 16-cv-507-SM Opinion No. 2018 DNH 194 Thomson Reuters Corporation, Defendant
O R D E R
Plaintiff, Ryan Landry, filed this proposed class action
against his former employer, Time Warner Cable, as well as
Thomson Reuters Corporation. Landry alleged that Time Warner
violated various provisions of the federal Fair Credit Reporting
Act (“FCRA”), as well as New Hampshire’s statutory analogue. He
also claimed Time Warner wrongfully terminated his employment
and, in so doing, violated New Hampshire’s Whistleblower
Protection Act. But, in the wake of the Supreme Court’s
decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018),
Landry voluntarily dismissed all of those claims from this case
and will pursue them in arbitration, as required by the terms of
his employment contract. See generally Stipulation of Voluntary
Dismissal (document no. 32).
What remain, then, are Landry’s claims against Thomson
Reuters Corporation (“TRC”). In his amended complaint, Landry advances four causes of action against TRC (on behalf of himself
and two proposed classes of similarly situated plaintiffs).
Generally speaking, Landry asserts that TRC is a “Consumer
Reporting Agency,” as defined in the FCRA, and that it prepared
and disseminated a report about him that contained inaccurate
and out-of-date adverse information, including false statements
that he had served time in a Texas prison - all in violation of
the FCRA. See Amended Complaint (document no. 40) at paras. 30-
34.
Pending before the court is TRC’s motion to stay these
proceedings pending resolution of the ongoing arbitration
between Landry and Time Warner. In TRC’s view, Landry’s claims
against it are entirely derivative of those against his former
employer. Specifically, TRC says Landry lacks standing to
pursue his claims against it unless he can establish a causal
connection between his injury (i.e., loss of his job) and Time
Warner’s reliance upon the allegedly inaccurate and/or outdated
information contained in the report TRC prepared and
disseminated. That is to say, Landry must demonstrate some
particularized and concrete harm flowing from TRC’s alleged
violations of the FCRA. And, because Time Warner denies that it
discharged Landry for any reason related to that report (an
issue that will be resolved in arbitration), TRC asserts that
2 principles of judicial economy counsel in favor of staying these
proceedings. If, says TRC, the arbitrator determines that
Landry was fired for reasons unrelated to TRC’s report, then
Landry cannot show any injury flowing from TRC’s alleged
statutory violations. Under those circumstances, he would lack
standing to pursue any FCRA claim against TRC.
Landry, on the other hand, does not directly address the
issue of standing. Rather, he asserts that because he seeks
both actual and statutory damages for TRC’s alleged violations
of the FCRA, there is no reason to delay this proceeding while
he pursues his claims against Time Warner in arbitration.
According to Landry, the reason Time Warner fired him, and
whether it relied upon TRC’s allegedly improper report, are
immaterial to this litigation; he need not establish a causal
connection between TRC’s statutory violations and his harm.
Instead, says Landry, he can still recover statutory damages
from TRC without a showing of any actual injury; to recover
statutory damages, he merely needs to show that TRC willfully
violated one or more provisions of the FCRA. See Plaintiff’s
Objection (document no. 41) at 6. See generally 15 U.S.C.
§ 1681n (authorizing the recovery of statutory damages).
While the parties’ briefs are not entirely helpful (since
they seem to be arguing different points), the court concludes
3 that even if Landry’s discharge was not directly linked to TRC’s
alleged violations of the FCRA, his amended complaint adequately
alleges particularized, concrete harms stemming from those
violations sufficient to vest him with standing to pursue his
claims. Nevertheless, establishing that Landry has standing to
pursue his claims against TRC does not resolve the question of
whether a stay is appropriate.
Because Landry is seeking actual damages from TRC - that
is, damages stemming from the loss of his job with Time Warner -
a stay of these proceedings would seem entirely appropriate,
pending resolution of the arbitration proceedings between Landry
and Time Warner.
Background
Accepting the factual allegations of Landry’s amended
complaint as true - as the court must at this juncture - the
relevant facts are as follows. In July of 2015, Landry applied
for a job with Time Warner. As part of that application
process, Landry authorized Time Warner to conduct a pre-hiring
background check. That background check revealed - correctly,
it would seem - that Landry had no criminal history. On August
7, 2015, Time Warner hired Landry as a “retail specialist” in
its Gorham call center.
4 Landry claims he performed his job duties in a satisfactory
manner and soon became one of the highest performing sales
people in the call center. But, on December 3, 2015, he was
called into a meeting with two members of Time Warner’s
corporate security division. Landry says that during the course
of that meeting, one of Time Warner’s representatives accused
him of having been convicted of a crime (and having served a
prison sentence) in Texas, and he began asking Landry questions
about that alleged conviction. Landry denied having ever been
convicted of a crime in Texas or having served a criminal
sentence there. He claims the Time Warner representative
responded by saying, “Funny, you have the same date of birth and
Social Security Number as the Ryan Landry who served time in
Harris County, Texas.” Amended Complaint at para. 24. At the
close of that meeting, Landry says he was suspended without pay
“because the Corporate Security Division had received
information through a report that made them believe that Mr.
Landry had been convicted of a crime in Texas.” Id. at para.
27.
Based upon that interaction, Landry inferred that Time
Warner must have conducted another background check on him - one
he says he never authorized and of which he was unaware.
5 Indeed, he specifically alleges that Time Warner “utilized an
unauthorized consumer report to run a background check on Mr.
Landry which it obtained through [TRC’s] CLEAR (Consolidated
Lead Evaluation and Reporting) service.” Id. at para. 29.
Landry further alleges that the report provided by TRC “included
adverse information that was more than seven years old,
including, but not limited to, arrests and/or dismissals of
criminal counts from 2000” - much of which he says is wholly
inaccurate. Id. at 32. Finally, he claims that TRC “knew or
should have known that [Time Warner] would use the information
in the [report], in whole or part, for the purposes of
establishing Mr. Landry’s eligibility for employment.” Id. at
33.
In the days following his suspension, Landry contacted
officials at the Harris County prison and confirmed that a
person who shares his name did indeed serve time there.
However, neither that individual’s birth date nor his social
security number is the same as Landry’s. Landry then contacted
Time Warner and explained what he had learned. He says Time
Warner acknowledged that there had been a mistake and admitted
that Landry had not lied on his job application. “Despite this,
[Time Warner] informed Mr. Landry that the Company had
nonetheless decided to terminate his employment.” Id. at para.
6 38. Time Warner explained that Landry was being fired for a
reason entirely unrelated to the confusion concerning his
background - that is, for having violated workplace conduct
rules. Landry says he was provided with few details about the
alleged incident that formed the basis of his termination and
asserts that it is a pretext for some sort of unlawful conduct.
As noted above, those FCRA and employment-related claims against
Time Warner - including Landry’s claim that Time Warner
terminated his employment based upon inaccuracies in the TRC
report - are no longer before the court and will be resolved in
arbitration.
After he dismissed his claims against Time Warner in this
proceeding, Landry filed an amended complaint against TRC. In
it, Landry alleges that TRC violated the Fair Credit Reporting
Act in four ways: (1) it provided Time Warner with a consumer
credit report without certifying that Time Warner had disclosed
to Landry that the report was being procured for employment
purposes and without providing a summary of Landry’s rights with
respect to that report, see 15 U.S.C. § 1681b(b); (2) it failed
to notify Landry of the fact that it was reporting public record
information and failed to maintain strict procedures to insure
that such public record information was complete and up-to-date,
see 15 U.S.C. § 1681k(a); (3) it failed to follow reasonable
7 procedures to assure the maximum possible accuracy of the
information provided in the reports it prepared, see 15 U.S.C.
§ 1681e(b); and (4) it provided outdated, adverse information
that antedated the report by more than seven years, see 15
U.S.C. § 1681c(a). Landry seeks actual damages for injuries
proximately caused by TRC’s violations of the FCRA or, in the
alternative, statutory damages. He also moves the court to
appoint him to represent the classes identified in his amended
complaint, and to certify those classes pursuant to Rule
23(b)(3) and/or (b)(2).
As mentioned earlier, TRC moves the court to stay these
proceedings, pending the resolution of Landry’s claims against
Time Warner, which are currently the subject of arbitration.
Discussion
I. Authority to Stay Proceedings.
It has long been recognized that, as part of its inherent
authority to manage its docket, a federal district court has
“the power to stay proceedings when, in the court’s exercise of
its discretion, it deems such a stay appropriate.” Emseal Joint
Sys., Ltd. v. Schul Int’l Co., 2015 DNH 066, 2015 WL 1457630 at
*1, (D.N.H. March 27, 2015). See also Baggesen v. Am. Skandia
Life Assur. Corp., 235 F. Supp. 2d 30, 33 (D. Mass. 2002)
8 (“Where a case involves both arbitrable and non-arbitrable
claims, whether the non-arbitrable claims should be stayed
pending resolution of the arbitrable claims is generally
discretionary with the court.”). In determining whether it is
appropriate to stay litigation pending the outcome of related
arbitration proceedings, courts consider several factors,
including: (1) whether a stay will unduly prejudice or
tactically disadvantage the nonmoving party; (2) whether a stay
could serve to clarify and/or simplify the remaining issues to
be litigated; and (3) whether the case is at an early stage
(e.g., whether discovery has been completed, whether a trial
date has been set, etc.). See, e.g., Sevinor v. Merrill Lynch,
Pierce, Fenner & Smith, Inc., 807 F.2d 16, 20 (1st Cir. 1986).
See also Emseal, 2015 WL 1457630 at *2 (considering similar
factors in the context of resolving a motion to stay patent
litigation pending patent reexamination).
Here, TRC asserts that all relevant factors counsel in
favor of granting its requested stay. But, its focus is
primarily on the second of those factors: whether staying this
proceeding while Landry arbitrates his claims against Time
Warner would clarify and/or simplify the issues to be litigated
in this case.
9 II. Standing and the Nature of Landry’s Claims.
The parties disagree on a legal issue that is potentially
dispositive of TRC’s motion to stay: whether Landry’s claims
against TRC are “derivative” of those he is pursuing against
Time Warner in arbitration - that is, whether Landry must first
demonstrate that Time Warner relied upon TRC’s report in order
to prevail on his claims against TRC. TRC asserts that Landry
lacks standing to pursue FCRA claims against it unless he can
show some actual, concrete harm - such as his discharge from
Time Warner - that was proximately caused by either the alleged
flaws in the report TRC provided to Time Warner or TRC’s other
alleged violations of the FCRA. Landry does not directly
address the issue of standing. Instead, he simply asserts that
his claims against TRC are not in any way linked to, or
derivative of, those against his former employer. That is,
Landry says that regardless of whether or not Time Warner
terminated his employment based upon the contents of the TRC
report, he can still pursue claims against TRC and recover
statutory damages from it for its (alleged) willful violations
of the procedural requirements of the FCRA. See generally 15
U.S.C. § 1681n (authorizing the recovery of statutory damages).
The United States Supreme Court recently addressed the
issue of standing in the context of FCRA claims and began by
noting that Article III standing consists of three elements:
10 “The plaintiff must have (1) suffered an injury in fact,
(2) that is fairly traceable to the challenged conduct of the
defendant, and (3) that is likely to be redressed by a favorable
decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016)
(citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61
(1992)). The Court then observed that, “To establish injury in
fact, a plaintiff must show that he or she suffered ‘an invasion
of a legally protected’ interest that is ‘concrete and
particularized’ and ‘actual or imminent, not conjectural or
hypothetical.’” Spokeo, 136 S. Ct. at 1548 (quoting Lujan, 504
U.S. at 560).
In the context of an FCRA claim, the Court concluded that,
to have standing, a plaintiff must have suffered some actual
harm - that is, an “injury in fact.” A claim alleging a “bare
procedural violation” of the FCRA, “divorced from any concrete
harm,” is insufficient. Consequently, the Court noted, a
plaintiff does not necessarily have standing simply because he
or she can identify some procedural statutory violation in a
setting in which Congress has made statutory damages available
to those who are unable (or for whom it would be difficult) to
prove actual damages.
Congress’ role in identifying and elevating intangible harms does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a
11 statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right. Article III standing requires a concrete injury even in the context of a statutory violation. For that reason, [plaintiff] could not, for example, allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III. See Summers v. Earth Island Institute, 555 U.S. 488, 496 (2009) (“[D]eprivation of a procedural right without some concrete interest that is affected by the deprivation . . . is insufficient to create Article III standing”); see also Lujan, supra, at 572.
Spokeo, 136 S. Ct. at 1549.
Critically, however, the Court also held that, under
certain circumstances, violations of the FRCA’s procedural
requirements can be sufficiently severe to constitute an “injury
in fact” for standing purposes. See Spokeo, 136 S. Ct. at 1549
(“[T]he violation of a procedural right granted by statute can
be sufficient in some circumstances to constitute injury in
fact. . . . [A] plaintiff in such a case need not allege any
additional harm beyond the one Congress has identified.”)
(emphasis in original) (citing Federal Election Comm’n v. Akins,
524 U.S. 11, 20–25 (1998); Public Citizen v. Dep’t of Justice,
491 U.S. 440, 449 (1989)).
In other words, some violations of the FCRA may be so
trivial that they cause no quantifiable injury. The Supreme
Court gave two examples of such inconsequential violations of
the FCRA: the inclusion in a credit report of an inaccurate zip
12 code; and, despite violations of FCRA procedural requirements,
the dissemination of an entirely accurate credit report.
Spokeo, 136 S. Ct. at 1550. Other violations of the FCRA,
however, may be sufficiently severe that those statutory
violations alone constitute a concrete and particularized
injury. See generally Macy v. GC Servs. L.P., 897 F.3d 747, 756
(6th Cir. 2018) (“In sum, Spokeo categorized statutory
violations as falling into two broad categories: (1) where the
violation of a procedural right granted by statute is sufficient
in and of itself to constitute concrete injury in fact because
Congress conferred the procedural right to protect a plaintiff’s
concrete interests and the procedural violation presents a
material risk of real harm to that concrete interest; and (2)
where there is a ‘bare’ procedural violation that does not meet
this standard, in which case a plaintiff must allege ‘additional
harm beyond the one Congress has identified.’”) (quoting Spokeo,
136 S. Ct. at 1549) (emphasis in original). Although Landry’s
argument on this point is largely undeveloped, the court
nonetheless concludes that his amended complaint alleges a
particularized and concrete injury - at least as to some counts
- sufficient to vest him with standing to pursue his claims
against TRC.
13 Following the Supreme Court’s decision in Spokeo, courts
have attempted to distinguish between procedural violations of
the FCRA that are “trivial” or “meaningless,” and those that are
sufficiently severe to cause (or present a significant risk of
causing) concrete harm. See Robins v. Spokeo, Inc., 867 F.3d
1108, 1116 (9th Cir. 2017) (“Spokeo II”) (“[t]he Court suggested
that even if Congress determined that inaccurate credit
reporting generally causes real harm to consumers, it cannot be
the case that every trivial or meaningless inaccuracy does
so.”). So, for example, on remand from the Supreme Court, the
Court of Appeals for the Ninth Circuit in Spokeo II adopted the
following analytical framework:
In evaluating [a plaintiff’s] claim of harm [under the FCRA], we thus ask: (1) whether the statutory provisions at issue were established to protect his concrete interests (as opposed to purely procedural rights), and if so, (2) whether the specific procedural violations alleged in this case actually harm, or present a material risk of harm to, such interests.
Id. at 1113. See also Strubel v. Comenity Bank, 842 F.3d 181,
190 (2d Cir. 2016) (“Thus, we understand Spokeo, and the cases
cited therein, to instruct that an alleged procedural violation
can by itself manifest concrete injury where Congress conferred
the procedural right to protect a plaintiff’s concrete interests
and where the procedural violation presents a ‘risk of real
harm’ to that concrete interest.”); Lyshe v. Levy, 854 F.3d 855,
14 859 (6th Cir. 2017) (“Spokeo allows for a bare procedural
violation to create a concrete harm . . . [when it constitutes]
the failure to comply with a statutory procedure that was
designed to protect against the harm the statute was enacted to
prevent.”).
Here, Landry’s amended complaint adequately alleges that
TRC’s violations of the FCRA “actually harm, or present a
material risk of harm to,” the concrete interests Congress
enacted the FCRA to protect. Spokeo II, 867 F.3d at 1113.
Specifically, he alleges that TRC’s various violations of the
FCRA resulted in the dissemination of a consumer credit report
without his knowledge or permission that contained outdated and
materially false information - including the false statement
that he was convicted of a crime, and served a prison sentence,
in Texas. Plainly, those are the types of reputational harms
flowing from the publication of false and damaging information
that Congress sought to prevent when it enacted the FCRA. See,
e.g., Spokeo, 136 S. Ct. at 1550 (“Congress plainly sought to
curb the dissemination of false information by adopting
procedures designed to decrease that risk.”). See also Pittman
v. Experian Info. Solutions, Inc., No. 17-1677, 2018 WL 4016604,
at *4 (6th Cir. Aug. 23, 2018); Syed v. M-I, LLC, 853 F.3d 492,
496–97 (9th Cir. 2017); In re Horizon Healthcare Servs. Data
15 Breach Litig., 846 F.3d 625, 639 (3d Cir. 2017); Sullivan v.
Greenwood Credit Union, 520 F.3d 70, 73 (1st Cir. 2008). See
generally 15 U.S.C. § 1681 (Congressional findings and statement
of purpose).
Consequently, even if Landry cannot demonstrate that his
discharge was related to TRC’s credit report, his amended
complaint adequately alleges concrete and particularized harms,
proximately caused by TRC’s violations of the FCRA, sufficient
to vest him with standing.
III. A Stay is Appropriate.
Having determined that Landry has standing to pursue his
claims against TRC, the court must next consider whether it is,
nonetheless, appropriate to stay these proceedings pending
completion of Landry’s arbitration with Time Warner. It is.
In his amended complaint, Landry alleges that, as a result
of TRC’s willful violations of the FCRA, he (and other members
of the proposed classes) “have suffered and continue to suffer
damages.” Amended Complaint at paras. 71, 76, 80, and 85. But,
the amended complaint does not allege that any of the inaccurate
or outdated factual statements about Landry as contained in the
TRC report were disseminated to anyone outside of the two
16 members Time Warner’s Corporate Security Division with whom he
met. He does not, for example, claim he lost employment
opportunities with other entities as a result of the TRC report,
or that he was denied credit, or that he suffered reputation
injury in the community. Accordingly, his efforts to recover
“actual damages” from TRC would appear to be linked directly to
his ability to establish that Time Warner relied upon TRC’s
report when it decided to terminate his employment.
And, as the court has noted earlier, that very issue -
whether Time Warner relied upon the TRC report in reaching the
decision to terminate Landry’s employment - will be resolved in
the ongoing arbitration. Once the arbitrator resolves that
disputed factual issue, it will likely be binding on the parties
in this proceeding. See generally FleetBoston Financial Corp.
v. Alt, 638 F.3d 70, 79 (1st Cir. 2011). So, it seems
appropriate for this court to stay this action pending
resolution of that material factual question, rather than move
forward at the risk of inconsistent determinations.
On balance, then, the factors relevant to the court’s
determination regarding appropriateness of a stay counsel in
favor of such a stay. First, the pending arbitration
proceedings will likely clarify and/or simplify material issues
17 to be litigated in this action. Moreover, Landry has not
suggested that a stay would cause him to suffer undue prejudice
or tactically disadvantage him. And, finally, this proceeding
is at a relatively early stage: Landry filed his amended
complaint against TRC less than two months ago, a scheduling
order has yet to issue, and the parties have yet to engage in
discovery.
Conclusion
There are two means by which Landry might demonstrate that
he has standing to bring his FCRA claims against TRC: first, he
could show that he suffered actual (not speculative or
conjectural) “concrete harm” as a consequence of TRC’s alleged
violations of the statute (e.g., the loss of his job). See
Lujan, 504 U.S. at 560–61; Spokeo, 136 S. Ct. at 1549-50.
Alternatively, he could demonstrate that the procedural
violations about which he complains are, themselves,
sufficiently severe to constitute an injury in fact. The former
issue will be resolved in the ongoing arbitration between Landry
and Time Warner. But, because the court concludes that Landry’s
amended complaint adequately alleges the latter, he has standing
to pursue his claims against TRC - regardless of the outcome of
the pending arbitration proceedings.
18 Nevertheless, the outcome of those arbitration proceedings
is important for another reason: it will likely determine
whether Landry has the ability to recover actual damages from
TRC, or whether he will be limited simply to statutory damages.
For the foregoing reasons, Thomson Reuters Corporation’s
Motion to Stay Proceedings (document no. 33) is granted. The
parties shall notify the court when arbitration proceedings
between Landry and Time Warner have been resolved.
SO ORDERED.
____________________________ Steven J. McAuliffe United States District Judge
September 24, 2018
cc: Amy E. Tabor, Esq. Michael A. Caddell, Esq. Benjamin J. Wyatt, Esq. Michael Varraso, Esq. Abigail S. Romero, Esq. Joseph W. Ozmer, II, Esq. Michael D. Kabat, Esq. Michele E. Kenney, Esq. Eric Bosset, Esq. Geoffrey J. Vitt, Esq. Neil K. Roman, Esq.